According to a June, 2020 survey conducted by PwC, a global network of firms delivering services for businesses, 64 percent of CFOs planned changes to products or services. Additionally, MIT Sloan School of Management reports that many small business owners significantly cut business and even personal spending early in the pandemic. But, it’s likely that, out of desperation, many companies took a “spaghetti approach” to their overall business models in the hopes that something would stick enough to help them to survive.
As your business emerges on the other side, you will undoubtedly want to make some changes in an effort to get out of survival mode. While it can be exciting to recognize that this might be the time to envision growth in your future, it’s important to return to a more thoughtful approach to your decisions. You’ll make better choices if you take the time to ask, “What if …?”
Haste Often Makes Waste
Hopefully, any sudden ideas that you implemented rather suddenly during the shut-down were very successful. However, it takes just one situation that you don’t consider to turn a great idea into a bad one. Exploring things that might happen — and how you would address those situations — can protect you from avoidable errors.
Let’s say that you want to add your newly-invented personal teleporter to your product line. Once you got the science right, the device was relatively simple to produce, so you rushed it to market, and it was extremely popular. Imagine your surprise and disappointment now that you’re seeing competitors flooding the market with lower-priced knock-offs.
What if you had thought ahead enough to predict what your product’s popularity would actually mean? You may be proud that you had the foresight to make sure that you had plenty of space to pack a massive inventory. Too bad that you didn’t need such a large inventory because you didn’t think hard enough to realize that you also needed to secure a patent before bringing the product to market. Rather than gaining short-term sales before your competitors started taking over, you could have kept a lucrative market all to yourself.
Rely on Multiple Resources to Help Predict Outcomes
Your initial enthusiasm can easily blind you to the potential realities of things that might happen. A critical step in implementing any idea is to find ways to take an objective look before you move forward. Make a habit of using sources like the following to gain a clear-eyed forecast of how everything is likely to roll out:
- Data analysis: Whenever possible, turn to data from your business or even statistical information to help you envision how your idea will turn out in the real world. A realistic analysis can help you determine if you can really afford to move forward with a new approach — and whether it will be a winner.
- Friends and family: You might think that the people in your life will automatically approve any idea that you have. But, in an effort to protect you, they are just as likely to foresee things that can go wrong. By all means, pay attention to the objections raised by naysayers; however, if you can identify solutions to their concerns, your plans can still be successful.
- Informal psychology: You’ve been around people long enough to realize that they may not react as you would expect. Your idea undoubtedly involves other people, so you should try to predict their possible reactions. What if your employees resist doing all of the extra work? What will happen if your parts supplier is unwilling to provide you with the custom sizes that you need to get your new product onto your shelves? The more resistance that you can predict up-front, the more likely you will be ready with the solutions that will resolve them.
- Online research: Even simple queries, like “how many businesses in Paducah sell cupcakes?” or “production challenges of making transporters” can get you to focus on what-if issues. Of course, if transporters don’t currently exist, then you’ll have to amend your query to consider something that’s as similar as possible. If you’re not getting enough helpful results, change the wording in your query until you see something that is more appropriate.
- Your imagination: When you spend time deeply imagining how your plan will work out, you’re likely to see potential game-stoppers, as well. In fact, if you don’t see some potential flaws, then you’re probably not thinking hard enough. Don’t automatically allow such negative visions to stop you from pursuing your idea. Point your imagination toward possible solutions; then use your what-if power to predict what might happen with your new approach.
- Chart it out: Put your imagined assumptions in writing. This does not require a formal process, but you need to break everything down into individual steps using a flow chart. For each step, chart out potential results. Then, address each issue that needs to be resolved. Rinse and repeat until you are looking at a workable plan.
Predicting Outcomes Requires Some Analysis, and Lots of Common Sense
Face it: you don’t have a crystal ball. Most likely, you’ll have to rely largely on careful research to arrive at the most accurate prediction of the things that will go right and wrong with any new business idea.
Still, while complex spreadsheets and massive scientific analyses can sometimes accurately point toward good and problematic outcomes, you have to get your own intuition into the game. A good dose of common sense is often the tool that you need to move forward successfully. Samuel Taylor Coleridge said it well: “Common sense in an uncommon degree is what the world calls wisdom.”